It is said, or used to be, that you can’t go wrong in the food business. No matter what, people gotta eat. Well, today in China, that theory is being put to the test. Very strongly tested. Maybe the same in your part of the world? Whilst China’s much hyped 6/18 shopping extravaganza showed the Chinese were returning to spending and overseas luxury brands, such as Mercedes Benz were enjoying double figure growth again, the recovery if it is one, is shaping up to be a little lopsided.
As inferred above, Chinese consumers are spending big, but it seems, spending selectively. Cosmetics was one such niche to shine in the last 6/18 sales fair, much to the delight of Perfect Diary and no, it is not a typo, that is a brand of cosmetic in China. Not just any brand by the way~ However, with International travel still not really going anywhere, travel agents are not seeing quite the same rush for domestic locations. Perhaps the money “saved” on travel and duty free stores is now finding its way into the domestic China luxury market? Stats tend to support this.
Whilst the virus is not selective in whom it targets, rich or poor, the knock on effect is felt more keenly by the lower income brackets. This is reflected in slower sales of “mundane” consumer products, electrical appliances etc. The F&B [Food and Beverage] industry is also not seeing such a huge growth with KFC and Budweiser still dragging the sales chain. So yes, people gotta eat, but this is being seen in supermarkets, not cubs, bars and restaurants. It may be contained in China but the ghost of Covid casts a very long shadow of fear with Chinese.
However, maybe all is not lost for the hitherto mentioned markets. Help may be at hand by way of the China Ministry of Commerce . This year, the month of September, starting next Wednesday the 9th will see the launch of “consumption promotion month.” Expect the usual suspects, carnivals e-com promotions. Yet, the last week of this promotion, cunningly coincides with the end of the 7 day National day holiday. Also known as “The Golden Week” In China, not just for its generally fair weather, but as it is a bonanza time for most China brands and retailers as millions of Chinese travel. So maybe we could possibly expect something unexpected?
There is a a fuller version courtesy of Bloomberg Intelligence reprinted by Caixin complete with data analysis and statistics. Our head image of night time summer shoppers in Sanlitun, Beijing is also courtesy of Caixin.
We at Aim2D would love to know what is happening in your corner of the world? What markets, sectors seem to be recovering- what are still languishing? Who or what are the winners, the losers? What incentives, stimuli or recovery polices are in place? Let us know in comments please?
Thought for the day:
I could dance with you until the cows come home.
On second thought I’d rather dance with the cows until you come home.—Groucho Marx
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